The process of opening a business account can vary from country to country, but there are a few common steps you can expect. Business accounts are typically opened during the incorporation stage of your business. In this blog, we provide a step-by-step guide on how to open a business account and everything you need to get one up and running.
What is a Business Bank Account?
A business or corporate bank account is used solely for business transactions. These accounts are generally used by large enterprises, sole traders, charities, and other business organizations. Businesses can open accounts with traditional banks or modern alternatives like online banks, neo-banks, fintechs, and electronic money institutions (EMIs).
Traditional vs. Online Banks
Traditional Business Bank Accounts: These are the corporate accounts you open in a local branch, like Lloyds Bank or Santander in the UK.
Online Business Bank Accounts: These accounts operate electronically using the internet, without physical branches. They leverage technology to provide services. Examples include fintechs and EMIs like 8S Money, Wise, or Revolut.
With a traditional business bank account, you can:
- Make deposits
- Send and receive payments
- Apply for business loans
- And much more
With an online corporate account, additional services include:
- Invoicing and billing tools integrated with accounting software
- Merchant services (e.g., e-commerce payment gateways)
- APIs and integrations with accounting tools and CRMs
It’s worth noting that with an online business account like 8S Money’s International Business Account, sending and receiving international business payments is much faster and cheaper than with traditional banks.
Who Should Use a Business Account?
Sole Traders: Individuals who are self-employed and running their own business. Having a business account is necessary for separating personal and business funds.
Limited Companies: Businesses that are legally distinct from the individuals who run them.
Getting Started
So, we’ve covered what a business account is and who needs one. Now, let’s dive into how to get started. The first step is to gather the required documents. You’ll need the following:
- Personal Identification Documents: Government-issued photo ID, such as a passport or state-issued ID card.
- Business Registration Documents: Documents that demonstrate the legal structure and registration status of the business.
- Tax Identification Number: A unique identifier assigned to a business entity for tax purposes.
Evaluating Your Options
Once you have the required information, you’ll need to start evaluating bank options. Consider different factors to ensure that the bank you choose aligns with your business’s specific needs and goals. Here’s what you’ll need to consider:
Customer Support: Managing your corporate account alongside other business obligations can be challenging, especially with international payments. 8S Money provides unparalleled customer support via dedicated account managers who take a consultative approach to your business banking needs. Start your application today and be pre-approved in less than 15 minutes.
Services: Consider whether the account includes services such as:
- Checking and savings accounts
- Merchant services
- Business loans
- Lines of credit
- Online banking and mobile apps
Fees: Protecting your bottom line from additional fees is crucial for any business. When choosing the right business account, consider:
- Monthly maintenance fees
- Transaction fees
- Overdraft fees
- ATM fees
- Wire transfer fees
- Any other charges that may apply to your account
By carefully evaluating these factors, you can choose a business bank account that best supports your business’s growth and financial management.
